Affilates increasingly left out

The television upfront season is underway, and the big unreported story continues to be the squeeze on the network affiliate model. While writers and observers are excited about what’s being offered, broadcast companies that used to be the delivery mechanism for network programming are finding their status completely untenable.

If you’re an NBC affiliate, for example, are you concerned that the network is launching a Website where new episodes will appear before they launch on the network airwaves? Are you concerned that NBC’s upfront gave as much time to its online efforts as broadcast?

Here’s Rafat Ali of PaidContent.org:

Digital was underscored as a priority on a par with developing the prime time slate during the NBC press conference with NBCU execs Jeff Zucker. Randy Falco and Kevin Reilly. “It will continue to be as important a focus for us going forward as linear development.” They want to close the loop between the platforms.
The more the networks talk about online, the less attention goes to the affiliates, and they are left to fend for themselves.

How long will the affiliate broadcast model continue? On February 18, 2009, the era of analog television will end in the U.S. as a government-mandated move to digital television begins. Most people don’t think this will impact those who already get their local TV via cable or satellite, but the truth is that channel positions will be changing, with local affiliates moving to three-digit channel tiers. That local station you grew up with — the one that spent all those millions of dollars branding their channel number — will be lost in the sea of fragmented digital TV. When added to the mix of what’s taking place today, I just don’t see how the model will survive that big a change.

Digital PR guru Steve Rubel says television’s future will be mostly ad-free:

As the technology gets more sophisticated and the generation that grew up with the Internet , iPods and always on connections become adults, I see a day coming when a lot of TV content will a) be paid for and b) consumed ad-free.

Now, some content will always remain free and ad-supported. However, in the future – as technology progresses – you will have to pay for the best programming, even if it’s carried by ABC, NBC, Fox or CBS. These shows will be sold a-la-carte, as subscriptions or in packages and they will all be delivered over the Internet protocol. Once purchased you will be able to watch these shows on any number of portable devices/phones, a computer or on your Internet-connected HDTV.

He goes on to ask the inevitable question, “Where will all that ad money go?” Nobody really knows.

Meanwhile, an online survey by Bolt Media found that four out of five 16-18 year olds couldn’t name the big four networks. This should increase sleepless nights for broadcasters, because it portends the world Steve is referencing above. As the last group of conventional television viewers passes through the python of broadcasting, the industry looks for sustenance from people who’ve entered a completely different snake. As we say in the south, it ain’t gonna happen.

The only hope that local affiliates have is to migrate to the web with new business models while the web is still essentially a land grab. Those who get the niches first will be successful. Those who do not will cease to exist.

Where will all that ad money go? Good question, and one that will impact our entire economy.

Comments

  1. Well you made my morning.

  2. Where will all that ad money go?

    I suspect that much of it will simply flow up the value chain to content originators rather than broadcasters as increasingly-expensive, decreasingly-disguised product placement. This, after all, would allow someone to monetise even pirated consumption and answer the crucial long-term question "who pays for production if so many viewers insist on stealing the shows?"

  3. mel taylor says:

    the time to experiment with new, local ad sales models is now. web dollars are increasingly looking for a home in the local markets. maybe we should graciously accept those dollars ?

  4. your Internet-connected HDTV?

    Forgive me if I am skeptical. Even with extensive compression, you are looking at 25Mbps (at least) to make HDTV watchable. Can a neighborhood with 100 homes (that’s a SMALL neighborhood) sustain hundreds of channels each feeding that bandwidth? In far future – possibly. In three years? Not likely.

    I like the rest of the article, though…

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